Immigration raids having chilling effect as fear keeps customers away from small stores

U.S. Immigration and Customs Enforcement (ICE) officers detain a suspect as they conduct a targeted enforcement operation in Los Angeles, California, U.S. on February 7, 2017.

Immigration raids are starting to have an impact on small businesses in the West, with some merchants suggesting a climate of fear is keeping customers away.

"We're seeing more cases of people reluctant to patronize the stores they were going to," said Mark Arabo, owner of San Diego's Lulu's International Market and former president of the Neighborhood Market Association, a business group of about 2,000 small stores in California, Arizona and Nevada. "It's fear for ICE and it's fear for the government."

The U.S. Immigration and Customs Enforcement agency has held several enforcement actions in Southern California that have generated headlines, including the arrest last week of a Mexican immigrant dropping his teenage daughters off at school.

Lori Haley, an ICE spokeswoman, said in a written response Monday that agents and special officers have made "criminal and administrative arrests every day in the course of carrying out their mission to uphold public safety." She added, "Our arrests are targeted — we don't engage in indiscriminate sweeps or raids."

Even so, worries persist among immigrants about enforcement actions, and some businesses have been forced to lay off employees to cope with the falloff in business.

"Some are cutting across the board 20 to 30 percent," said Arabo. "It's not a good thing for the economy. It's not a good thing for jobs."

Arabo said the drop in business was noticed shortly after the inauguration of President Donald Trump, who has cracked down on immigration.

CNBC interviewed several other business owners over the phone for this story but they didn't want to be identified out of fear of bringing unwanted attention to their businesses.

Pedro Gomez, an undocumented worker at a convenience store in East L.A., said through a translator that there's been a "growing concern" that immigration raids may target his heavily immigrant community. "There's talk about the potential [for] raids reaching this area."

Also, Gomez said fear is being driven by concerns that immigrants could be targeted by ICE if they have any misdemeanor convictions on their record.

"People who might have convictions for small offenses or minor things in court are concerned about being singled out and being deported," Gomez said.

To protect immigrants, some cities have moved to decriminalize minor offenses.

Last month, the Los Angeles City Council and Mayor Eric Garcetti agreed to remove criminal penalties for street vendors operating without a permit.

"Decriminalizing street vending is a humane, critical first step toward protecting hard-working Angelenos who are trying to make an honest living and should not have to worry about a criminal record," Garcetti said in a statement.

However, sidewalk food vending without permits is still unlawful in unincorporated parts of L.A. County, which makes up more than 65 percent of county territory.

Trump signed an executive order on Jan. 25 directing the Department of Homeland Security to hire 10,000 additional immigration officers. His order also gives delegated authority for immigration enforcement to state and local law enforcement, although California has resisted such efforts.

Trump has threatened to withhold federal funds from California, where there's a currently a "sanctuary state" bill — Senate Bill 54 — pending in the California legislature. The state measure would prohibit state or local law enforcement agencies or school police from using resources to investigate, detain or arrest people for immigration purposes. The bill has already passed the Senate Public Safety committee, although two Republican members opposed it.

Overall, California has an estimated 2.3 million undocumented immigrants, with just under three-quarters coming from Mexico, according to the latest data from Pew Research Center. Its latest research found more than 80 percent of the unauthorized immigrants in Arizona were from Mexico.

Sacramento County Sheriff Scott Jones on Monday criticized the measure during a press conference saying it would allow "dangerous, violent career criminals to slip through the cracks and be released back into our communities."

According to Arabo, he's heard cases of some merchants seeing a sales decline of as much as 20 percent.

The financial impacts are being felt in Arizona, too.

"In Arizona, the government and politics are much different," Arabo said. "Arizona has an issue of government profiling or deporting."

The state's reputation for immigration enforcement actions at the local level stem from the days when Republican Joe Arpaio was Maricopa County sheriff and he held sweeps on businesses. Arpaio was voted out of office and replaced by a sheriff who has taken a lower profile on immigration.